Food inflation fell to 5.9% in November, from 6.5% the previous month. Vegetable price inflation fell to 22.3%, from 31.5%, and meat prices moderated to 5.5%, from 5.8%. Pork prices also cooled to 5%, from 5.2% in October.

Meanwhile, producer prices continued to stay in negative territory and average retail fuel prices fell 1.6% in November.

Ting expects consumer prices to rise 3.1% in 2014, from 2.7% in 2013. This will partly be because of the base effect since consumer prices were lower in the first half of 2013. "Inflation expectations could rise with stabilized domestic economic growth, the slowly improving global growth outlook and higher home prices in major Chinese cities," said Ting in a note to clients after the data release. "On the other hand, commodity and raw material prices could remain soft in 2014, helping contain CPI inflation."

Ting doesn't expect the People's Bank of China to tighten monetary policy in 2014 for two key reasons. 1. While the government has a CPI target of 3.5%, " the chance for monthly inflation to be sustained at the official cap at 3.5% or above is low." 2. It isn't clear if the cap is monthly, quarterly or annual and the "government is unlikely to react to monthly inflation readings, which are subject to many temporary factors and base effects."

Here's a look at the trajectory of Chinese consumer and producer prices: